The UK government has confirmed that three grant schemes covering the pandemic should close by 28 August.
It is thought that around £1.58bn of the grants’ funds have yet to be distributed, leading for calls for the money to be allocated to small businesses, retailers and hospitality companies who, Colliers International said, “have fallen between the cracks”.
John Webber, head of business rates, Colliers International, said: “We have had a bizarre scenario where there are some areas of the country with still ‘too much grant’ to pay out, such as Cornwall who has paid out £235m of its whopping £281m grant, but other parts of the country where the grant allocations were simply not big enough.”
According to government figures as of 13 July, of the £12.33bn originally allocated in the grant schemes, just over 87% has been paid out, leaving 13% still undistributed to businesses. This has been primarily because of State Aid Rules which stopped some businesses with multiple properties from accessing all the grants particularly multiple store retailers.
There have also been some parts of the country where not all businesses have claimed the grants and others where the grants were too restrictive to really help.
Webber cited the major cities, particularly London where this has been the case. The City of London, for example in comparison to Cornwall only received a £14.74m allocation, despite the recognised large number of retail and hospitality as well as office businesses based there. As a result, the funds both there and in Westminster were quickly oversubscribed.
One of the problems cited by Colliers was that the initial grant was granted to those retail and hospitality companies based on their rateable value. In London this meant they needed to have a rateable value of under £15,000 to receive the £10,000 grant and an RV between £15,000.01 and less than £51,000 to receive the £25,000 grant. However, because RV was based on rents, many London retail and hospitality businesses were not eligible given the high level of rents in London compared to elsewhere
Webber said: “It’s been a postcode lottery as to how and if a business actually managed to benefit from these grants. In terms of the discretionary grant fund, businesses also had to evidence a loss of income resulting from Covid-19 to receive grant monies, and different boroughs gave different deadline dates and conditions for applications. It’s been confusing and inconsistent.”
“Now the government has announced the end of all the grant schemes, we urge any retailer or hospitality business to get their claim in as soon as possible. The VOA is under resourced at the moment and there are some delays in claims being processed. The deadline date of August 28th may mean many may run out of time to claim.”
“We are therefore petitioning that the government takes this into account and rather than return unused grant monies to BEIS, it redistributes the £1.58bn left to support those businesses, who have still missed out on funds so far, or reconsiders the hard deadline. Supporting our retail and hospitality businesses are vital if we are to get the UK economy back on its feet.”